The MP curve may be used to represent ________
A) movements of the real interest rate as a direct policy action of the Federal Reserve
B) movements of the real interest rate that are independent of direct Federal Reserve action
C) how the real interest rate is related to the inflation rate
D) all of the above
E) none of the above
D
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Any target value of the nominal interest rate chosen by the Federal Reserve implies a specific value for ________.
A. potential output B. the budget deficit C. government purchases D. the money supply
In a Bertrand oligopoly, firms select ________ and earn ________ economic profit.
A) quantity; zero B) price; positive C) quantity; positive D) price; zero
According to the hypothesis of New Keynesian inflation dynamics, an increase in aggregate demand brings about
A) initial sluggish adjustment of the price level followed by higher inflation later on. B) initial rapid adjustment of the price level followed by lower inflation later on. C) initial sluggish adjustment of real GDP followed by more rapid real GDP growth later on. D) sluggish growth in real GDP both initially and later on.
Demand describes how much of something people:
A. are willing and able to buy at alternative prices under certain circumstances. B. want, but may not necessarily be able, to buy under certain circumstances. C. are willing and able to sell under certain circumstances. D. be able to buy, but might not want to buy under certain circumstances.